European Shares Leap on AI Optimism and Eased Middle East Tensions

European shares surged on Tuesday, heading for their largest quarterly gain in over five years, driven by excitement surrounding artificial intelligence and easing geopolitical strains in the Middle East. Significant contributions came from advancing technology stocks and positive healthcare sector performance, alongside declining oil prices.

European stocks opened stronger on Tuesday, poised for their most significant quarterly rise in over five years due to growing enthusiasm about artificial intelligence and diminishing Middle East tensions.

The pan-European STOXX 600 index rose 0.6%, reaching 639.77 points at 0804 GMT. The benchmark index is set for its third consecutive monthly gain, climbing 9.7% this quarter, marking its strongest quarterly performance since October 2020. Technology stocks soared 1.7%, marking their best quarterly gain since October 2001, highlighting strong demand for AI infrastructure. This sector is also expected to surpass its Wall Street counterpart this month and quarter.

Lithography giant ASML increased by 3.33%, while chipmakers STMicroelectronics and Infineon rose 3% and 2.7%, respectively. Siemens Energy shares climbed 5% following a positive pre-close earnings call. Reduced Middle East tensions and falling oil prices also boosted the market, with Abivax shares surging over 20% after positive study results. The healthcare sector gained 0.9% overall.